Forex Trading Journey for Beginners

1. Class Outline: Welcome to my Forex trading class. My goal is to introduce you to the world of forex. I've been trading for a while now, but I remember what it was like starting out. So I created the course to be used as a Fast Start Guide to Getting up an octave in for x. You will learn what you need to be aware of before you even make your first deposit of real money into your broker. It's important to have this knowledge before you start putting your hard-earned money into a forks account. For X offers a potential to make some extra money. But if you enter a position to large or you fail to safeguard your traits, you place yourself at a high-risk. However, you are here and ready to learn. So I hope to overcome this by revealing to you the ins and outs of forex. I've divided my training into two sections. In the first section, you will learn the theory of Forex trading. I will introduce you to the main concepts and the main platform for trading. You'll learn about the types of forks, traits, how to calculate your position size, and how to safeguard yourself from blown your account in the first few traits, that will be a very important lesson. And I'll also show you an effective technique for entering for expositions. In section two, you'll learn the practical side of Forex trading. The main focus will be on technical analysis of your charts. I'll introduce you to different types of indicators. And when they are most effective, I'll share with you strategies that have withstood the test of time and are commonly found in the traders toolbox for trading. And I will show you the best way to back-test a strategy so that when you trade life, you can expect better results and not test on tactics using your own money. There's quite a lot to cover. Before we move on, I'd like to mention that the first few lessons may seem difficult. My aim is to introduce you to a lot of concepts early on. They initial exposure to these concepts will be valuable. And in the second part of this course, you will see them applied to real trading situations. Once you see the practical side of things, a lot of concepts we'll think in and start making sense. When I was learning for x, I tried to study all the theory before making a trade, and this was overwhelming. The most value I got was when I opened my first account and started trading. The practical side enabled me to understand the theory much more clearly and I believe the same will apply to you. I'm not saying that you have to trade with real money initially. What I'm actually recommending is that you start out using a demo account and using fake money. They experience will be priceless. Thank you for joining my training. I hope that you find the content interesting. Let's get started with the prerequisites you need to know before trading. 2. Trading Basics: Before you Start Forex: Welcome to the first lesson. I will cover the main terms that are used in Forex trading. The purpose here is so that you are familiar with them or at least have heard of these terms. Then in the following lessons, you will see how this terminology is used in a live trading environment. So the first term is currency pairs, pretty obvious. There are three types and they are categorized based on popularity. The eight most frequently traded currencies are called major currencies, and you can see them listed here. Next we have the minor currencies, the middle group and the least popular, or the cross currencies. Again, it's a sliding scale based on popularity. So you can trade any of these. And when you set up metadata for the trading platform, you will see where to find these currencies. When you see a currency pair, they will be quoted like this. So you can see US dollar and Swiss franc. The base currency is the first currency. It shows how much the base is worth against the second currency. And the second currency is called the quote currency. Next we have pips. Any currency movement is measured in pips. Pips are on every chart measurement. You will use pips to measure your orders and size of orders. It's like the way to navigate through that your charts using pips. Depending on the currency and the broker you're using. You will sometimes see pips. Other times you will see many pips or known as a pipette. It's one-tenth the size of a PIP. Again, you will see this in action later when we jump onto our trading platform. In Forex trading, there is a large potential to make money because you are trading using your broker's money. When you buy a currency pair, you do not own it. This is not like going to an exchange and physically changing here US dollars to Euros. When you buy a currency in forex, there has to be a corresponding cell to complete your order. This is because in forex you trade using leverage, e.g. for every $1 you trade, you could potentially have $100 at your disposal. This would mean that you are using a one-to-one hundred leverage on your traits. The positives are that you can earn a lot of money as you're trading with larger sums. The negatives are that you could lose all your money by using your broker's money. However, there is a safe guard to prevent this from happening, and I will share this later. Different brokers offer different leverage for trading. It can be even as high as 5,000 leverage, although this is too risky. When you are starting, I suggest you use a leverage of one to 20. As it's not too big, you need to learn the mechanics of trading first before taking a risk and trading with larger leverage. To make trading with leverage possible, your broker will require a money deposit known as a margin, and then you can set your leverage. This money deposit is known as your margin. And margin is simply a portion of your funds that your Forex brokers set aside from your account balance to keep your trade open and to ensure that you can cover any losses. It's the equivalent to security when getting a loan, essentially, you are borrowing money from your broker in order to make larger traits. E.g. if you have $100 in your account and you're trading with $1,000. So one to ten leverage, the broker takes a certain amount from $100 as the margin for that trait. When the trade is completed, you get back your margin. If you are trading with a $1,000, but your account only has $100 in it. If the trade goes against you, your entire account can be wiped out. So how do you save, guard yourself from having your account liquidated if your trade goes bad? The answer is by using a stop-loss order. This is an open order that is a number of pips away from your entry price. If the stop-loss is reached, your position will be exited and you will only lose a predetermined amount. So what is this predetermined amount? It's your risk ratio. When it comes to Forex trading, each position you enter represents a risk to your account balance. So if it goes against you, you lose a certain percentage of your account. E.g. if your account is $100 and you are risking five per cent, then your stop-loss will be placed at a level that if it is hit you lose $5. Are generally acceptable process is to use a risk ratio of 1-2% of your account. Now the reality is when you're trading, you sometimes hit consecutive losses. If you are trading at 10% risk ratio and you hit five losses in a row, then you are down 50% of your account. If however, you are using a risk ratio of two per cent and you have five consecutive losses, then you are down only ten per cent. So this is a safe guard and stop losses should not be treated lightly. Now let's talk about lot sizes or position sizes. For x is traded in specific amounts called lots. When you place an order to buy a currency, it is specified in lots. The standard size lot is 100,000 units of a certain currency. But there's also a mini, micro and nano lot sizes. Some brokers show you lots, while others show actual currency units. Depending on the lot size, each pip will have a different money value. When I go to the trading platform, metal trader for, then you will get familiar with lot sizes and placing orders. And then we have the broker. And the broker is a company that is handling your account and through which you are trading forex. Forex brokers will quote you two different prices for a currency pair, the bid and ask price. The bid is the price at which you can sell the base currency. The ask is the price at which you can buy the base currency. The difference between these two prices is known as the spread. Instead of charging a separate fee for your Forex transactions, the cost is built into the buy and sell price of the currency pair. So the broker makes money by selling the currency to you. And the broker also makes money by buying the currency from you. The difference between these two prices, it's the spread and it can be known as the fee for training. And a couple of more forex concepts here. As you are using leverage, you can buy and sell in Forex transactions. When you buy, it's going long. When you sell is going short. And when trading forex, you can select the timeframe that is most suitable to your trading style. So you can trade a five-minute charts, 15 min charts. Or if you want to have a more long-term strategy, you can trade daily charts but more on this later. Don't worry if this seems like a lot to take in. The first lesson is meant to introduce you to the terms in the following lessons, you will see how everything fits in when you start Forex trading. By the end of this first section, you will become familiar with these terms. I can promise you that. Okay, Let's move on. 3. The Platform for Forex Trading: Welcome back. I have unimportant step for you to take. I think this is necessary so that you can follow along with my next lessons and get familiar with the process of trading forex. And that is to open a demo account with a broker. There are many brokers available depending on your region, you may have to find a local broker. In this lesson, I'm not recommending any broker because this is all about setting up a demo account so that you can trade. Once you sign up for a broker, you will download their trading platform. And one of the major trading platforms is me2 iterator for this is like your control module for executing trades and managing your account. The platform that I use for demo purposes is a wonder. Let me show you how it works. Here's the old one, the website. And this broker is actually quite a good broker. So if you consider to use it for live trading, It's an option. But I find that their demo account is really, really great and it's very easy to set up. So what you would do is you would just go to their website, click on menu, go to CFD trading. And then you can click on Try them up and, or starts trading. And you can open up a demo account. So you'll have to register an account with them. And when your account is open, then what you can do, or actually you can even go there right now, just go to platforms and then Meta trader for they have a number of other platforms here. Personally, I don't really like I never tried on a phone or just the screens too small. They have a desktop up. And I went up, which it's okay for trading. But the thing is it doesn't have all of the features that I'm after. So metal tray the four I'd say this is the tool that you need. It's like a control unit. Everything that you need for trading, for setting up charts is here. So what you would do is click on metal trader four. And then here again, you can either click here to create a demo account, filling all your details, register, download the metal trader platform, and then when it's downloaded, then you will have to just open the platform login and you'll get something that looks like this. This is metal trader for and pretty much all of my lesson, I'm going to be using metaphor for explaining you how forex works. Explaining you how to set up orders, showing you the different types of indicators that you can use. So I would say that metal tray, the four, It's the best place to start Forex trading as a demo account, of course, but it's the best way to learn all the ins and outs of Forex trading. Later on, you can have a look at the other platforms, but I have a feeling that once you learn mandatory for you, we'll stick to it. This concludes this lesson, so I highly recommend that you go out and create your own demo account at this moment. 4. 3 Types of Forex Orders: In this lesson, I want to introduce you to the types of forex orders. There are three orders you can take to enter our position. The first is a market order. When you either buy or sell using a market order, it means you are buying and selling at market price. The order will happen instantly at whatever the market price is. Disorder can be relevant to your trading strategy. But there are two more order types that you should be aware of. First, let's cover the buy, sell, stop order. I find the easiest way to remember this order is with an analogy. So let's say you're waiting for a bus and you are at the bus stop. The bus drives and stops, picks you up and drives on and it drives on in the direction it was initially going in for a buy stop. Order is like being picked up at a bus stop. So let's convert this analogy to price. For a buy stop order, the price starts lower than your ideal entry price, but you anticipate that it will increase. So you place your order above the current price. If the price rises, then your buy order will be executed, and then hopefully the price will continue to rise. A sell stop order follows the same principle except you want to enter a short position, so you want to sell and you want to enter it below the current market price, whether it's a buy stop or a sell stop order. These are pending orders, so they only get executed once the price reaches your level. Next, we have something known as a buy limit order and a sell limit order. In a byte limit order, you anticipate that the price will go up. But first, it will make a pullback. Or you look at the chart patterns and currently the price is too high for you to enter. So what you do is you want the price to come down and if it reaches your level, then it will trigger a trade and then you will enter. So when you create a limit order, you expect the price to bounce. So it will go down, hit your order and then bounce and continue going up. The same applies to sell limit orders, but the opposite applies. So the price is going down. You think it's going to go down even further. But you expect it to make a pullback, in this case, go up before it takes another drop. So you place a sell limit order above the current market price. If the price goes up a little, it will execute your order, you will enter it, and then hopefully you expect the price to go down. And that's all for the three order types. I hope my analogy has made this much simpler for you to understand. Do not worry when we go to mete trader for you, we'll see exactly how the bi stop by limit orders are market orders, how everything is applied in action. 5. Forex Orders in Practice: In this lesson, I want to show you how the different order types Luke, in a real trading environment. And by real trading environment, I mean a simulated trading environment. So as you can see here, we have a chart. It's the Australian dollar, Japanese Yen. And I can click Play, see how the chart performs, and then pause it anytime I want or if I want, I can just skip it ahead 1 bar at a time. So here we have a chart. This pink line here, It's a slow moving average. I believe it's a 200 period moving average. And this is a technical indicator. I'll introduce you to these indicators in future sessions. And the red line, it's 15 period moving average. For now this is not important. What I want to show you is the order types. So we have a chart pattern that seems to be going down and it may actually bounce from this moving average. So what I want to do is I want to buy it at this moment, by it at market value. So I would just click on Buy. And what happens to this green line represents my BY order. So instantly I will enter this position and I will hold currency. So let's play and see where the price goes. So after the initial drop, the price actually went in a good direction. So what I'm going to do is I'm going to terminate this position with a small profit. Okay. I have just closed it and as you can see, we bought it here, closed it here. In a live trading environment. You will not see this. This is part of the plugin that I'm using so that I can play around with past data and sit and test different strategies. So this was a market order. Now let's say, let's just play it a little bit. Okay, We can see that the price has started to go down. So I want to place a sell order at market price. And again, we see this line here, so it represents my Excel order. Let's see what happens to the price. Okay, it went completely, completely against me. So let me just close it. And that was a sell order. Here. We see that it didn't go in our way, so we would have lost money. Let me just actually skipped ahead a little bit to see something a little bit different. Okay, we have a chart pattern here and it seems to be trading up. So now I'm going to do a buy limit order. So what I mean by, by limit is I expect the price to go up and I want to buy, but I don't want to buy at this level. I want to buy at a lower level, something here, e.g. and this level, it's actually 17 pips away from the current market price. So I will click on here on pending order. And I will select the number of pips away from the current market price at 17, and I will click on Buy limit. So as you can see here, it has created a pending order below the current market price. This is like by limit order. Now, let's see if this works at all. Okay, It has entered below. And if we look at traits, we have currently one open position and here's the Profit and Loss of this trade. This is a simulation, but it would be nice if it went up a little bit. Perfect. Okay, I'll pause it right there we see this current profit here. This was a great example of a buy limit order. Price was here we wanted to enter it here, we set up the order here. When the price fell, it triggers this pending order, entered our position and then the price went up. So let's close this position at a profit. So this was a byte limit order. Now I'm going to show you a sell limit order. So e.g. a. Sell limit order occurs when obviously we want to sell, but we want to sell at a better price. So current prices here. But we want to sell it at, let's say this level. So let's say we want to enter a sell order at 14 pips away. So I'll send setup the distance at 14 pips and I'll create a sell limit order. So it's appending order. If the price touches this point, it will sell. Let's see what happens. Okay, this time didn't work, the price just fell down. However, I still want to use this example and show you what a sell limit order looks like. So I'm going to modify the current order and I'm going to set it up here. So the price is here. If it reaches this area here, it will trigger my cell order. So currently you can see here we have a sell limit order in place. Let's see what happens. Okay, the order, it changed. So when it reached my level, it triggers the order. And now we are in a cell positions, we are in a short position. Okay, little problem here. We entered the cell position and then the price went up, doesn't matter. But the whole purpose of this exercise is to show you what the traits look like. I'll just move the price along a little bit. Here's another example, prices going up. And let's say this time I want to enter a buy stop order. So a buy stop order is I am entering the order above the current price. I will set up my bicep order here, which is 12th pips away by stop. And what I'm anticipating, what will happen is that the price will go up. I will enter it here, and there will be another, say, massive breakout and the price will go up again. Let's see if this works out. This by stop order. If you rewind the video a little bit, this was a buy stop order. It hits this area, it entered my trained, and now I am in a byte position. I'll pause it here, and this is a great example. So I anticipated a little bit of a breakout at this level. And what happened with splits triggered disorder. There was a bit of a pull back and then the price went up again. So I would be in profit. That was an example of a buy stop order. And this one would have been profitable. And now, although there is a strong uptrend in this chart pattern, what I want to show you is an example of a sell stop order. Let's assume that I think the price is going to go down, but only if it breaks through, say, this zone here, I'm going to sell setup a sell stop order, 26 pips away from the current price. I think there's a bit of price action going on here. Perhaps this is some sort of support. If it gets broken, then the price will go down. So 26 pips away, I'm going to click on cell stop. And here's my pending order myself stop order. And here you can also see that type is cell stop. Now let's play and see how this plays out. There's a massive uptrend going on here and something has happened here. What I'm going to do, I think, I still think this is a great example. I will just modify disorder. So this is the new zone. If the price drops to here, it will enter, it will trigger my cell order and then I anticipate the price to go down even further. Finally, it fell and this sell stop order got triggered. Now I am in a cell position. How many purposes? That's 35 pips. Let's say I want to close it. And this one was profitable. So that was the three main types. So what I just showed you in this video was the market order. The order is executed immediately whether you are buying or selling. Then we have the bias top or the sell stop order. And by limit and a sell limit order. I hope this clears out the theory that I presented in my previous lesson. And now that you know how the orders actually work, do not worry if this is new, it takes time to learn. And when you actually login to your own demo platform and start setting up these types of orders. They will become second nature to you. Thanks for watching and let's move on. 6. How to Calculate Position Size: In this lesson, I want to go over the easiest way for you to calculate your position size. The reason you need to know what size you are buying is because you are using leverage and buying orders with borrowed money. If you enter a position size too big and the trade goes against you, you are at a risk of blowing your account. Before entering any trade. You need to know the trade size or lot size or position size, let's call it. All of these refers to the same thing. And to calculate the lot size, you need to know the following. The currency pair you're trading, your account size, the risk ratio. So how much of your account Are you willing to risk? The stop-loss level? So at what price will you exit the trait? This will be your stop-loss. And you can calculate this by how many pips away it is from your entry price. And you need to know your trade size. So how much lots are you actually buying? Do not worry as I'm not diving into a mathematical calculation. For this, there is an easier method. Just go to this website and fill in the blanks. Quite literally. I'll show you that right now. Here we are on the website and it's literally the easiest way that I know of how you can calculate your position. So you start off by selecting the relevant currency pair. Then specify your main account currency and the account size. So let's say we have one account and a $1,000 in that account. And we want to risk $10, which is the risk ratio of one 1% of our account. Then specify the stop-loss level or how many pips away your stop-loss level will be. You will calculate the number of pips by reviewing your charts. So you will use metadata for, for this, for the trade size. Let's leave it at one in lots. You can change it to units if you want, depending on your broker, and then click on Calculate. So here we see that we are risking $10. Here's how many units we are buying, and here's the size of the order, 0.07 lots. So this is the one, this is the figure that you will plug into metal trader for to complete your order. Why make life difficult when calculating a position size, it is really so easy as just filling in the blanks. Let's continue to the next lesson. 7. The Strategy for Entering Trades: In the previous lesson, you learned how to calculate position sizes for your traits. Now I want to show you what you need to decide before entering the trait. It is not enough just to open an entry position. Each trade you take requires at least another trait. Can you think of what I am referring to? As you're using leverage for your trades and you need to put up some of your account balance as margin to open up position, you need to protect your balance. So you do this with a stop-loss order. Thereby, you protect your account balance with a maximum you will lose if the trade goes against you. So you have an entry position. And I stop-loss order. As you're starting out, I suggest you take a step further and set an additional take profit order. Price fluctuations are unpredictable and as simple news announcement can make the price go crazy. That's why it's important to secure yourself and plan out what a profitable and losing trade actually looks like. So I cannot stress this enough, but you should always use the stop-loss because there is two greater risk of blown your account. Leverage trading is nice, but it is risky. Stop-loss is the safeguard. Many advice that you should never risk more than 2% of your account size. When deciding that take profit and stop-loss levels, you should calculate how many pips apart this will be. Here's how this looks in practice. Here I am in metro either for, and currently I have the British pound, US dollar charts pulled up and I am using the 15-minute charts. So I can see that it's making, the price is making higher highs, higher lows. It looks to be going upwards. So let's say I want to enter a market order and I want to buy right now, the current price is here. The stop-loss. I want to set it below the previous low. So I will set it at this level actually to make it a little bit easier. Here's my stop-loss level. And the take profit. I'm also going to set this up. So I'll set it a roundabout here. So from the current price, I have a stop-loss at 48 pips away, and my take profit will be 70 pips away. So I go here, I click on New Order, and I make sure that the symbol selected is the British pound, US dollar. Here I specify the lot size, so I'll make it a small order, 0.01 volume. So the stop-loss will be me, just fill it in 1.20 060. Take profit will be 1.2 1239. And to show this to you, I'll delete these lines. Everything is set up, so I am going to buy, okay, I've entered that trade. This green line here shows the current price that I entered. As you can see here, you can see it by and the size of the order. This order here, It's my stop-loss order, it's appending order. And when I hover my mouse over it, I will see that the potential profit at this stop-loss, I mean, sorry, the loss I will make at this level will be $7.41. And it even shows me that it's 50 pips away. This metal trader on one that it's showing me the micro pips. So I just divide it by ten and I get pips. So 506 micro pips, or 50 pips away. Now this order here at the top, it's my take profit order. And again, it is a pending order that will be hit if the price reaches this level. So we chose me again that the potential profit will be $9.85 and it's 67 pips away. And if we go over here to the bottom, we can see the current order that I've placed. And currently I'm at -40, $0.04. However, we already see here, this is my stop-loss, which has already been set up and a take profit which has also been set up. In a live trading environment. What you can do is you can move these traits. Let's say I want to change the stop-loss to below. Here. I've changed it. So this will be the new stop-loss level. So here I will only lose $3.42. Similarly, if I want to adjust the take profit order, I can just move it. And now this has been set up differently. Alternatively, if I want to exited, I just click on the cross and now the order has been exited. So I sold it at a loss and then I go to account history. And I can see that on this particular trait, I'd lost $0.35. Now I'm going to show you another way that you can open a order and then later setup a stop-loss. So just actually just quickly. So again, newOrder market execution and I'm just going to buy. So this is the level that I have bought. Now to set a stop-loss. Here's what I can do. I just clicked and dragged it over here. And it automatically set up a stop-loss. And at this level I would be losing $6.92. Okay? So I'll go to trade. I will exit this trade. That's what I wanted to show you in this video. I would say that the best way to start trading is to make sure that you control all elements. Price fluctuations are really unpredictable. So with a trade goes against you, It's good to have a stop-loss in place as a security so that you limit the amount of money you can potentially lose. 8. Forex Platform Intro: Welcome to the next lesson and actually welcome to mete trader for which I have already called the control module for all of your Forex operations, I think this is the best tool because it's the easiest tool, although it looks a little bit difficult, especially the first time you login. Once you login a couple of times and use the platform, it's actually very, very simple. I have already configured my charts. I like the white background charts with green and red candles. Other people like something different. But actually, this is what you are going to see when you open it up. This is the custom default in there. This is the default settings. And personally I do not like this. So what I do is I go to properties and I format the chart. And I've already created a template that I like to use, triple EMA, but let me just remove these indicators so that you can see the basic charts that I like to play with. I think this is the traditional white background, green and red candles. Now, when it comes to forex, what you need to do is you need to decide what time-frame do you want to try that. So if you want the long-term game, you can use for our charts, perhaps daily charts. The advantages of trading or even 1 h lead charts. And the advantages of trading these timeframes are that the charts, they're actually a lot cleaner. It's much easier to notice certain patterns and even the indicators that I will show you how to use, the indicators, they are more accurate on a longer timeframe. But a lot of people, they have more time so they can actually go and try the 15-minute charts. This chart, the euro New Zealand dollars, 15 min, actually looks quite nice because there are patterns forming, there are transforming. And this looks very, very tradeable, but sometimes depending on the time of the year and depending on the currency, 15-minute charts, five-minute charts there, they just look like a big mess. So 1 h and for our arbitrary, but it all depends on your trading style. So you will have to decide how many hours you spend in front of a computer, how many signals you want to see per day, and then decide on the ideal time frame for your trading style. Let me go over a couple of principles that I covered in the first section of this course. Firstly, I will go to symbols. And here's what I want to show you. Depending on your broker, you will see different types of settings. Sometimes you will see major currencies, minor currencies, and cross currencies. However, I'm using the one, the demo account, and it's pretty much, I have a full list of currencies under these categories. But basically it works like this. Yeah, they, they are mixed up here, but basically major currencies are the most popular currencies that are trading against the US dollar. Minor currencies are less popular currencies that some trade with you as though some trade between each other. And then the cross currencies, they are the currencies that are not popular like e.g. check corona trading with the police latae, there will be a cross currency. But what you have to do is they a lot of these currencies that are grayed out. So you will have to double-click on them. Select the ones that you want to trade. And then we can close this and then they will appear here. And then what you do is you open a chart window, you will get the black themed chart settings. Then you can, you can create a template, load the template that works best for you. Here's another template that I've created. Next, what I will show you is over here, this is a demo account and you can see the balance of my trading account and the free margin. Now when I want to open a new trait, I click on new trade. And let's say I want to buy at this level. Here's the volume 0.01 and I'm trading the Australian dollar, Japanese yen. I will not set a stop-loss here. I'll take pleural fluid. I'm just going to create a buy order. I click on it. And this green line represents my entry-level. And here you can see that the balance is $1,733. Free margin has lowered because margin of $50 is used for this particular trait. So this is the margin, this is the money that I put up from my very own balance so that my broker can make the trade. And I believe to leverage that I'm using in this account is probably about one to 20 as well. Now, if I want to add a stop-loss, actually I can just click and drag it below the moving averages. And now I have a stop-loss placed 53 pips away from my entry price. Now you will see, again, depending on your broker, sometimes this will be displayed in pips. Other times in many pips, here I have 530, it's in many pips. So I just divide by ten and I see that 53 pips. That's how far away my stop-loss is set. And if the price goes down and hits my stop-loss, then I would lose $6.17. But I will actually close this trait because it's just a quick example. Okay, next, because this section will be focused on indicators, I will show you some strategies, how you can use different indicators or different price patterns. If you do want to, like, I've added three moving averages here to add the indicators I could hear. And the moving average is a trend indicator. So I would just click on it and then it would be added. So then I can customize this moving average, whatever I see fit, and then apply it to the chart. This is the platform. Hopefully you have already set this platform up on your own computer. In the next lesson, I want to actually dive a little bit deeper and introduce you more to the types of indicators. So I'll see you in that lesson. 9. Trendlines for Trading: Welcome back. In this lesson, I want to talk about trend lines. And trend lines are lines that show you zones at which there's a huge chance that the price will reverse. So it's very relevant to what swing trading, and it's also relevant to figuring out the trend, hence the name trend lines. I'll show you how to analyse a chart and you may be surprised by the results. Now, this is a normal chart of the British pound, US dollar, and 15 min. Of course, trend lines do apply to 15 min charts. However, because of the fluctuations in price, I think it's better to analyse trend lines over I hire time zone. In this case, for an example, I will use the for our charts. So this is how we figure out the trend lines. Basically, we draw the trend line, click the button, and let's connect a couple of bottoms. And we can also connect the tops. Let's make it fit a little bit better. And actually, I think this is actually a random chart that I just popped up when I loaded the wonder. And I think it's a really good example of trend lines. Here's the thing, especially the top trend line. What we see here is that the price bounced from the bottom to the top of the trend line then binds to the bottom, to the top, to the bottom. And then what happened here? Actually, I can draw another trend line like this. And as you can see, the price goes up, bounces to the bottom, bounces through, top, bounces to the bottom. And basically the way that you trade with trend lines, while there are lots of different variations. But the theory goes like this. Once the price reaches this top, there's a high chance of a reversal happening. So you can place a short order to sell. And then when the price reaches the bottom, there's a chance that again, it will reverse, so it's time to buy. So that is the first version of trending trading with trend lines. The other theory is that if a trend line is broken, then the chances are the trend has been broken and it's time to change. So in this case, the trend line gets broken and instead of going up again, it started slowly going down. Then we have this trend line, which I would say it is a trend line because we've got 1234 bounces here. You could say there was a fake-out attempt. Okay. We are to the current time periods, but let's move back in time. And maybe I can show you another example of trend lines. Actually there are plenty of examples right over here. So I'll select the trend line, can draw on here. And here. Now, what happens with trend lines is that sometimes they're parallel in the same direction at a time. They can be opening like they can be expending trend lines, or in this case, slightly decreasing trend lines. But the theory is that if you figure out that, okay, you figure out there's a point here, a point here, point here, point here, draw your trend line, then you can predict where the price is going to bounce. So here, if you draw it like this, you've got the bounds here, bounds here, and a couple of more bounces before it breaks. And when the train line actually broke, it started forming going up. And you will find it hard to believe, but we can draw another channel. So another two trend lines here. So we jumped from, we have two highs here, two bottoms here. We draw the trend lines. And as you can see, the price moved. Maybe it didn't go exactly 1212 bouncing from top to bottom. It's trade within this channel, within this channel. And this is another great example here. When the price broke through the trend line, it came back to the trend line and this trend line. So here the trend line was I support zone and the price always bounced away when it hit the trend line. But once it broke through the trend line, then the trend line became a resistance zone. So it hits here and then it came back down. And I'm willing to bet that we could draw some sort of new trend lines here. And then as you can see, price is trading within this trend lines. Okay, I think I'll zoom out a little bit. Okay, this is for our charts, but as you can see, the price was, I mean, the price, it was like a pattern and it was going down, up, down, up, and mostly it was trading within these trend lines. Could even go to daily charts. Here again, I can see the same pattern. You can actually draw it quite clearly here. So we feed the price was trading within these zones. Now, if I zoom in a little bit, yeah, I think that's I mean, considering that it took me 2 s to draw the trend lines, it's a pretty good indication of the trend and a pretty good indication of where the potential swing zones are, where the potential bounces will occur, then if there is a actual breakout, that is a good signal, that there could be a turnoff events and trend could start to go down. And actually over here, look at this. This is just absolutely amazing how many of these points, I mean, it's not a coincidence, but you can literally, I mean, this is a textbook example. It broke through this channel. The trends changed from an uptrend to a downtrend. And then if you look at it, we just have a series of bounces exactly off all of these trend lines until it gets broken. When it gets broken. Well, there was another I mean, there wasn't a change of direction to an uptrend, but there was a change in the pace of the downtrend, So it started going down more rapidly. So essentially, you can draw trend lines on any level that you want. But 1 h for hour and daily charts, you'll get the most exact trend lines because the charts, they look the neatest. If we go to 15 min charts, actually this chart looks quite good. But sometimes what you will find, the chart just fluctuate way too much in the trend lines, they look really, really bad. The principles that I've showed you here, they apply to all timeframes. But I'm just saying that it's clearer to see these trend lines in say, 1 h for hour and daily charts. And the way that you can trade them is you can use trend lines as one tool for your trading strategy. Of course, what you can also do is you can combine a trend line with an indicator to get you a second confirmation, okay? Is the price going to go up from this point? So what you could do potentially is you could even use relative strength index, e.g. and then see if, if the price coordinates, so if the price is at the bottom here, is that at the bottom of the relative strength index, is there a chance of it reversing? But the focus of this lesson is on trend lines. And I wanted to show you how the price moves and how easily you can actually draw these trend lines. And you can use it as a tool to enhance your training. Okay, Thanks for watching. Let's move on. 10. Support and Resistance Zones: Welcome to another lesson of technical analysis of your Forex charts. In this lesson, I want to focus on support and resistance zones. And by the end of this lesson, hopefully I'm going to show you something which you may think is quite odd and actually quite predictable when it comes to price charts. Support and resistance works on all of the timeframes. However, I find that because of the fluctuations that happened in price, It's better to take a higher timeframe, like 1 h or four hour. And I think this will be the best way for me to show you support and resistance zones. I'll just format this line. So the yellow line looks good. And actually I placed it here tactically for a good reason because I think this is a good support slash resistance zone. And the second one I will place right about here. Well, let's start with resistance. Price was going up. It hits this zone over here. And then rebound, tried to hit this ONE again, rebounded here again, and here again, we have four touches of this zone. And it never broke through this zone. Because we have these clusters of price action at these levels, there are resistance on the price does not want to break through and go further up. Now let's examine the support zones. From here, the price fell, bounced off this level and fell over here, bounced off this level again. And we could argue that there was a bounce here as well. So there are three touches here. It didn't want to go further down. Therefore, this is a support zone. And I've drawn the top-level resistance, bottom level support. And as you can see, the price is nicely trading within this channel. You can use this to figure out when to enter. You enter during the, when the price is at the bottom or when to sell, you sell when the prices at the top. Another thing that I will show you here, this one over here, the price cluster through, didn't break through. This was a resistance zone. Price came back down, came back up, broke through. And when the price breaks through a TKI resistance zone, then the resistance becomes a support zone. And then as you can see here, it was a resistance zone over here, and then it became a support zone after the price broke through. Let's move back a little and maybe I can find you another example of support and resistance. And I think I've just spotted something. Actually. I think this looks quite well. What I could even do. Move this like this. And I think I have good examples here. The price was going down and it bounced off the zone. Bounced off this song, came back down. And then finally, it broke through the support. When it broke through the support, it found another support level, which was over here. Then when it went back up, the previous support was a resistance. And when we look at the price charts, it actually is. This example is really good because you can see that the price, it's trading within these channels, within the support and resistance channels. And you can actually predict where there is a high chance of the price actually bouncing through. Or here the price went down a little bit further. It was like a fake-out. So you would have thought that maybe it would go down further, but now it's picked herself up and then start to trading within the channels again. But then when it broke through the resistance than the resistance became the support and the price started trading up. And the thing is, you can spot support and resistance zones on pretty much any chart, any currency pair whatsoever. The only thing that I would suggest is that you use the high timeframe because it will be a little bit more accurate. Let's go. Okay. So this was the one-hour let me just clear my chart and I will change to a daily chart. Examining this, I I think we have a zone here because you can see there are plenty of touches here. So this is a resistance area and other touch here. And I think there is one here. Move this down a little bit. And I think there's probably one here as well. But as you can see, there was a touch here, attached here, attached here. And then finally it broke through. There was a touch here and attach here. And then here's an interesting situation because when the price broke through this support level, it fell down to a previous support level. Now I will move the chart, not exactly sure what will happen, but I think this is a good example. This support level over here. It was more or less the support and resistance. You're never going to know exactly these, these are like zones. So actually another way that you could, you could portray these zones is something like this. It's not totally accurate, but it does give you an indication where there is a potential for the price to bounce. This support zone, I'd say it was pretty good because we have a bounce here. Perhaps we could move it a little bit here, adjusted, but we do have a bounce here, bounds here. And this support zone, that once the price broke through, it became a resistance zone. It's actually, it was adjusted a little bit. But the price kept on trading within these two zones and was bouncing off from this zone. They didn't want to penetrate the Zona, go any higher. This is a quick video I wanted to share with you a different strategy. Some people, they use this all the time. But I definitely think you should be aware of this because support and resistance zones are real. And they serve as a tool which you can use to analyse the market. Thank you for watching. Let's move on. 11. Forex Trend Indicators: Hello again, Tom. Here in this lesson, I want to go through a couple of the indicators that you can use to develop your own trading strategy. I click on this button here. Now I can add all sorts of different indicators. I've selected trend. And I think I will start with moving average. So I will set up a 50 period exponential moving average. This just means the way the moving average is actually computed. So there are a couple of ways I always use either simple or exponential, but you can play around and try different moving average parameters, and I can add it. So this is the first indicator, and this is a trend indicator. And by trend indicator, it's supposed to show you when the price is going to trend up and when the price is going to trend down. So how does it show you this? Well, this is like, you could say it's a baseline. And when the price breaks through, Moving Average, there is a chance that it's going to continue upwards. So here we sold breakthrough and fail. But then here it broke through, broke through this indicator, and then was trending up for how many 208 pips? Remember from the previous lesson, I have 2087 here because that's showing me mini pips. So I divided by ten and I have the pips. So 208 pips. Then we have the price. It broke through the moving average, tested it out as other resistance area didn't break through. It's completely again because it quickly fell back down. And then it started trending downwards for another 207 pips. So if we entered it here, it would have been a really, really profitable trade. And then here's another example where the moving average good broken and the price went up for a further 208 pips. So this is a moving average and it's actually really effective when the market is trending. Let's go back in time. I can show you another example. Okay, I think I have found something which will be quite interesting. Something that will be quite interesting over here. Okay, that's a really, really ugly color. I'll just make it something that's just more friendly to the eye, a little bit too friendly. Okay, That's better. Ignoring this, we see here the price was above the moving average and it was trending up. So this was a trending market and everything was okay here. However here, the price, the price will sort of in a consolidation, it will just moving up and down, up and down. And as you can see, the moving average, it didn't predict anything. It was just being broken all the time. This is the weakness of the moving average indicator. If it is a consolidation market, well, the moving average will give you a lot of fake symbols. So the trick is you have to figure out when it's going to be a trending market. And that's when you enter it. So any type of trends? Over here, we have another consolidation. By consolidation, I mean, prices just going nowhere. It's just moving up and down, up and down. And for this moving average is useless. But if we go to for our charts, and you can see whenever there is a trend in place, moving average gives you good, good signals. So this is, I think I'll remove this. This is the moving average. It's a trend indicator. We have other trend indicators. Another one is known as Bollinger Bands. And this is based on the moving average. It will give you three lines. I'll format it so that it looks a little bit better. The basis of the Bollinger Bands is we have the moving average and we have the average directional movement that determines the upper band and the lower band and the price, it's supposedly bounces within these bands. So the theory is if the price goes to the bottom of a band, it's a chance to enter because the price is going to go up. If the price goes to the top of the band, it's a chance to sell because the price is going to take a turn. So it's another type of trend indicator sometimes can be useful personally, I don't like this indicator. It gives a lot of fake symbols. However, it could be a good indicator that you can use to place your stop-loss zones. And I'll show you another trend indicator but for a different chart. Okay, Let's use the euro check Corona. I'll open the chart window. And the indicator which I will add, it's a custom indicator. It's called the super trend. Blue will be much more visible. And the way this works is that it's a trend indicator. And when you see the red line, it's a chance to sell because there's a high chance the price is going to start trending down. When the color of the line changes to blue, it's the time to buy because the price is going to be trending up. So as you can see here, little bit of a movement here, but it was giving us signals to buy here. This was a nice movement. It was a chance to sell. Color changed here. It was a chance to buy. It's a trend indicator. So it works best when the price is trending. In a consolidation may give you a couple of goods signals, but it's best used in combination with an oscillator. In that case. One thing that you could even do is you could add a moving average, which I showed you earlier. Let's say I hundred 50 period moving average. You could use this to determine the direction of the trend. E.g. if the price is below the moving average, then it's a downtrend. And in a downturn, you would take all of the red signals. So this would have been a good signal. You would sell here, would have been a good signal, and you would sell here. What you need to do in your own time, you do have some homework is you have to check out all of the trend indicators to see how they work, but also you can import your own indicators. So I imported something known as the super trend. This indicator is quite useful. They indicators are actually very easy to find because all you do is you type in MT four indicators in Google. And you will get tons of resources where you can download these indicators for free. 12. The Oscillators and when to use them: Welcome back. In this lesson, I want to talk about the next type of indicators, and these are the oscillators. So you have a whole list of different oscillators here. And basically, let's do the relative strength index first. Actually, I will just adjust it so it's a little bit more presentable. Yeah, that's pretty visible. So the way it works is you have two zones. The tertiary level, you have an oversold level. And this can be 30, can be 25, can be 20. However, you decide to customize it. But it's an oversold level. So basically, the way it works is that once the price goes below this, then expect a reversal. That the price is going to go back up because it's over salts, so it's a time to buy. So if we bought here, we would have been profitable. Let's see, the next breakthrough happened here. Here. So if we bought around this level, wouldn't have been great, but the price sort of bounced up. Now we have the 70 level, which is the oversold level. So it can be 70, 75, 80 depending on the price chart and depending how you customize it. So basically, when the price goes above or touches this line or crosses this line, it's in over bought territory. And it means it's time to sell. Here. It was the RSI was touching the line, so it was a time to sell. So if we did cell here, we would have been profitable. Next time it touched the line here and here. Well, if we enter on the bird this level, the price did fall down. The thing with oscillators is that they work really, really great in a consolidation market. So if you have the price which is moving from between two particular zones, it's not trending anywhere, it's in a consolidation, then these oscillators, they actually work quite fine. When the market is not trending, then trend indicators do not work, but oscillators do work. However, when the market starts trending will then turn into educators work. But the oscillators, they fall apart completely. Probably there wasn't enough movement here for trading. So when the line, when the oocyte line is just between the lines, just forget about trading because the price is going nowhere. And then the price started trending. And here's actually a good example where this indicator falls apart. In that here we had a touch of the indicator. So a brief crossover, it could have been a chance to buy, buy. The thing is market was trending downwards. So it would have been a lot. Actually, let me rewind this. Okay, here's a good example. The indicator crossed below the poverty level line here, given us an entry point, say roundabout here or here. Now if we hit Enter, we would have made a lot of many, many pips profit and would have been a good trait. Then the market starts to trending downwards. And we got a signal here to enter. It was a fake signal, we would have lost. But then the second signal to enter, we got here. And if we entered it again, we would've been quite profitable. So this is the RSI. Let me show you another oscillator. The stochastic oscillator, actually not my favorite oscillator. And I don't use it, but I think you should be aware of it. I'll just adjust this to make it a little bit more user-friendly. So in this indicator you have an overboard zone and an oversold zone. So basically, when the line crosses below, it means it's overboard. And then when there's a crossover between the two lines here, it's a chance to, in this particular case, to buy. So if you bought here would have been, would not have been a brilliant trade, especially since it immediately had a pullback. And then when the line goes above the 80 level and there's a crossover, it means it's a chance to sell. But as you can see here would have been a bad chance to cell. Here would have been, well, not brilliant as well, depends on your stop-loss. Here actually would have been a excellent opportunity to sell because you would have made a lot of profit. But the thing that you can do with this particular indicator is you can play around with the parameters. So I will just set it up a little bit longer time periods. And now the indicator, it looks a little bit better because it doesn't have so many movements. Now I could tweak it even further. And I suggest that you do. Follow a longer timeframe, it actually looks much better. I don't like where there are too many oscillations because it's not too much clearer. But this is an indicator that it works really well in a consolidation market. So we would have a nice dice entry signal here. We would have another nice entry signal here, clear as well, depending on where you would place your stop-loss, there was a good prediction. Here we got a sell signal which price kept continuing up, but the second cell signal was actually quite good. So as you can see, based on this chart, I slightly adjusted the settings for the stochastic oscillator. And now it looks a little bit much nicer. And I would say the signal that it gives you a more dependable. But on its own, I wouldn't use this signal if you're planning to use it, it's best to combine it with another signal. So e.g. you use this as your primary signal and then you have another indicator which is your secondary confirmation, which hopefully will keep you out of trades like like this one, e.g. where the price kept on going up, kept on going up. And maybe the second confirmation would say, okay, it's time to sell here. When you're setting up these types of charts and using technical analysis, it's best to actually combine the indicators to figure out a combination of a trending indicator on oscillator. The combination that works best for you that you're comfortable using and gives you the greater chances of success when you are trading. And I will show you another popular oscillator. It's called MAC D or MACD, and it's actually stands for moving average convergence divergence. And this is the default mark, the indicator, but I think I have another one here. I don't have the indicator here. So what I'll do is I'll pause the video and I will download it. Welcome back. So I downloaded it, added it to the metric for indicator folder and refresh my indicators. So now it is available in my platform. And this one looks much better. So I'll delete this indicator. This one I'll delete as well. And this one I will format so that it's a little bit more user-friendly or friendly to the eyes. So this is the moving average convergence divergence indicator. And the way that it works is when the two lines crossover, it's a time to enter a position. So if the lines cross-over below the middle line, you have a zero line here. It was a crossover below the zero line. It's a chance to enter to go long. And as you can see, this indicator would have been good over here. Now when the lines cross-over above the zero line, it means it's a chance to go short and to sell here. It would not have worked for us. But the crossover here was actually quite decent and we would, if we caught this trait, we would have made a nice profit. Then we have another crossover here, which means we would have traded very, very nicely. So again, this is an oscillator and basically you have a zero line. So if it crosses below the zero line, it's a chance to enter. If it crosses above the zero line, it's a chance to sell works very good In consolidation markets. Here we have a downtrend in market. And the signals were again, actually quite solid. So one of the strategies that you could adjust this, that you could just wait for this, for the crossover to happen, even if it's actually a trending market. Here's a cell signal. At first it wasn't all that great, but then we get another cell signal here. Eventually it went to our favor. Now there was a turn of tides, I would say. And we have a buy signal here. Let's see what would have happened if we bought it here. So it was a fake signal and we would have lost. But one thing that you could do is, well actually what I highly recommend is you never use one indicator on its own. You need to use another indicator. Now the MCC D, it is an oscillator. So what you can do to determine the trend e.g. is again, you could add a moving average. Basically, if the price is below the moving average, it means it's a downtrend. So the market is trending and you could take all of the cells signals using an oscillator. So in this particular example, here you have a sell signal. Here you have another cell signal, Here's another cell signal, Here's another cell signal. So because the price is below the moving average, you know, it's a downtrend. So you just ignore all the buy signals that you get and you get quite a few bicycles here, just take the cell signals. And that's another strategy that you could test out and see perhaps it works for you. 13. Where to Next: Congratulations for making it to the end of this course, we covered a lot of content, but now you are ready to start on your forex journey. I suggest you use your demo account first to get familiar with trading and forming a strategy that you can follow consistently. Now where to next? Even join my YouTube channel. It's full of strategies and forex tips that will help you along the way of becoming a forex trader. I've also included this link in the resources section of this course. In my channel, I've uploaded a number of fork strategy testing videos, and I highly recommend that you watch them because you'll get more insights into the reality of trading forex and what to expect in terms of returns from certain strategies. And don't forget to subscribe to my YouTube channel. This way you'll get access to my latest tutorials. I hope you enjoyed this course, but now it is time for you to put this knowledge into practice. I wish you all the best in your trading.